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Warner Music inks deal with We7

Will be the first to offer paid-for MP3s

LONDON -- Warner Music is the latest major to sign up to U.K.-based ad-funded online music service We7, and it is the first to offer paid-for MP3s on the platform.

Users can stream unlimited tracks and full albums for free on We7.com, in return for listening to short, targeted adverts before each track. The Oxford-based service began streaming free music from Sony BMG artists in April.

Warner Music U.K. will license its full digital catalog for streaming as well as making it available as paid-for MP3s to We7 from October.

The free music player is integrated into the download store, allowing users to purchase tracks straight away. As part of the agreement, the two companies will also provide a range of value-added digital products including album bundles with additional tracks, videos and interactive booklets.

"This innovative partnership brings together two increasingly popular modes of consumption, ad-supported streaming and MP3 downloads, to create a rich, versatile digital music experience that will monetize a broad spectrum of consumer behavior," Warner Music Europe president John Reid said.

We7 CEO Steve Purdham said, "Recently there has been a lot of focus on piracy, but this deal is reflective of the radically changing digital landscape where music fans can access high quality, safe and legal alternatives."

We7's advertising works by micro-targeting consumer demographics based on location, age and gender. The revenue will pay for the appropriate royalties. Veteran musician Peter Gabriel is one of the co-founders of the service.